New NPS Rule Change: Subscribers Can Now Opt for Multiple Annuities from the Same Life Insurance Company

The National Pension System (NPS) rules have undergone a significant upgrade, according to the Pension Fund Regulatory Development Authority (PFRDA), which now permits subscribers to buy numerous annuity plans from the same service provider. With this change, NPS subscribers will have access to a larger variety of annuity choices to meet their retirement goals. NPS subscribers who set aside more than Rs10 lakh for their annuity corpus will now be given the option to deposit Rs5 lakh in each annuity scheme.
According to a PFRDA circular from May 10, 2023, "The option of multiple annuities shall be provided for those subscribers who earmark the annuity corpus more than Rs10 lakh wherein Rs5 lakh utilized to buy each annuity scheme." This change grants subscribers the flexibility to diversify their annuity investments within the same Annuity Service Provider (ASP).
Currently, NPS subscribers are allowed to purchase only one annuity scheme from an ASP at the time of their exit from the scheme. The ability to choose different annuities from the same ASP will now be available to subscribers under the new rule, giving them more options for their retirement planning.
To facilitate the implementation of this rule change, the PFRDA has instructed Central Recordkeeping Agencies (CRAs) to develop the necessary system-level functionality. Until the new feature is fully established, ASPs can manage requests for multiple annuities received from subscribers and provide the required information to CRAs through the Reverse Information Flow (RIF) process.
The PFRDA believes that this rule change will greatly benefit subscribers by increasing their option of annuity products and enabling them to maximise their retirement income. The ASPs chosen by PFRDA are essential in overseeing annuity contributions made under various programmes. Upon retirement or resignation, subscribers will now have the choice to divide their retirement money among other annuity plans provided by the same ASP.
Currently, the following 14 ASPs are empaneled with PFRDA to provide pension services:
1. SBI Life Insurance Co. Ltd
2. Life Insurance Corporation of India
3. Star Union Dai-ichi Life Insurance Co. Ltd
4. ICICI Prudential Life Insurance Co. Ltd
5. HDFC Life Insurance Co Ltd.
6. IndiaFirst Life Insurance Co Ltd
7. Edelweiss Tokio Life Insurance Co. Ltd
8. Bajaj Allianz Life Insurance Co Ltd.
9. Canara HSBC Oriental Bank of Commerce Life Insurance Co Ltd.
10. Mahindra Life Insurance Co Ltd.
11. Tata AIA Life Insurance Company Limited
12. Max Life Insurance Company Limited
13. PNB Metlife India Insurance Company Limited
14. Aditya Birla SunLife Insurance Company Limited
These ASPs offer various annuity plans to suit individual requirements. The available annuity variants include:
  • Pension (Annuity) payable for life at a uniform rate to the annuitant only.
  • Pension (Annuity) payable for a certain period of 5, 10, 15, or 20 years, followed by lifetime payments to the annuitant.
  • Pension (Annuity) payable for life, increasing at a simple rate of 3% per annum.
  • Pension (Annuity) for life with 50% of the annuity payable to the spouse upon the death of the annuitant.
  • Pension (Annuity) for life with 100% of the annuity payable to the spouse upon the death of the annuitant.
  • Pension (Annuity) for life with the return of the purchase price upon the death of the annuitant.
  • Pension (Annuity) for life with 100% of the annuity payable to the spouse upon the death of the annuitant and return of the purchase price upon the death of the spouse.
The pension amount received will vary depending on the chosen annuity plan and the selected ASP. Subscribers are encouraged to conduct a comparative analysis of annuity plans and ASPs to make an informed decision that aligns with their retirement goals and financial requirements.



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Changes in Our Business Model
25th Sept 2020
Greetings from Moneylife Advisory Services
Between financial years 2019-21, SEBI has come up with extensive changes to investor advisor regulations. On Sep 23, 2020, SEBI had issued new additional guidelines. This comes just two months after extensive changes announced in July 2020. Earlier, in December 2019 there was an ad hoc circular
As a result of these changes, IAs, cannot accept fees through credit cards, will have to sign a 26-clause investor agreement, have to maintain physical record written & signed by client, telephone recording, emails, SMS messages and any other legally verifiable record for five years. IAs were already asked to record the suitability and rationale for every piece of advice given, sign them and store them for five years.
While these extensive and frequent changes, designed to strengthen the conduct of IAs are well-meaning, these have sharply increased compliance efforts and cost. We, being online advisors, find many of changes harder to implement, compared to advisors working in the physical space. We will have to have an army of advisors, administrative and tech staff to be compliant. If we do this, we will have to divert money to these areas and the cost of our service will double. We want to remain the least-cost service in the market to benefit more and more people. In the circumstances, we are forced to change our business model from “advisory” to “research”. This will mean the following:
What remains the same:
  • Recommendations on insurance, investment and Lion stocks, will continue as a part of the MAS premium subscription. Our strength has always been research and this will remain available to you through our recommendations.
  • The magazine and all textual content will remain as part of the service
  • We will have to suspend the restructuring tool.
What changes:
  • The interactions in Ask / Handholding will offer investment advice but not specific to your situation. It will offer information on investment products and also clarify your doubts about various financial products. It will be a forum for information, not for advice. This will be implemented with immediate effect and our guidelines in Ask, reflect this now.
Over the next few weeks our site and our communication to you will reflect these and other additional changes.
We feel this will not affect you much in terms of what really matters in investing: knowing what to buy and when to buy. This is our edge and it will still be available to you.
Debashis Basu